Advanced Trade: Brazil ETF

If you think our scandals are bad, we have nothing on the people of Brazil. What a train wreck. Implied volatility (IV) is way higher and the Brazil Capped ETF (EWZ) is down about 15%. The way this sets up, I think there is more downside in EWZ; however, one has to be careful how he or she trades the ETF because the IV is crazy high.

To reduce vega exposure (a position's exposure to changes in implied volatility), I like owning a bearish butterfly. I can buy a June $33-$31-$29 butterfly for about $0.30. I get decent risk-reward and the bearish exposure I want....20 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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